President Claudia Sheinbaum of Mexico said she had an "excellent conversation" with U.S. President-elect Donald Trump on Wednesday, lowering tensions stoked this week by the American leader's threat to impose tariffs.

The president-elect’s opening salvo in trade and border talks with the United States’ neighbors is casting a harsh light on the North American alliance.

Put simply, tariffs are a tax on imports. Here's what Donald Trump did with them in his first term and how they impact the economy.